DeepSeek, the Chinese artificial intelligence lab whose low-cost R1 model briefly wiped hundreds of billions of dollars off U.S. chip stocks last year, is in talks for a new funding round that would value the company at roughly $74 billion before new money comes in, according to people familiar with the discussions cited by the South China Morning Post. The Hangzhou-based company has also engaged CITIC Securities to help prepare a domestic initial public offering, a step that would make it one of the first major Chinese AI labs to test public markets.
The round under discussion would raise on the order of 50 billion yuan, or roughly $7 billion, pushing DeepSeek's valuation to about 500 billion yuan. That would mark a sharp jump from the approximately $50 billion valuation it secured in its first-ever outside funding round last spring, when it raised about $7.4 billion. Returning investors in the new round reportedly include battery giant Contemporary Amperex Technology, known as CATL, along with domestic venture funds Monolith and Shixiang Capital.
DeepSeek's spring round drew a roster of state-aligned and corporate money: Tencent contributed around 10 billion yuan, CATL about 5 billion yuan, and NetEase and JD.com roughly 3 billion yuan each, alongside a state-backed national AI investment fund, according to South China Morning Post reporting on the deal. Founder and chief executive Liang Wenfeng personally put in roughly $3 billion of his own money, a sign of how closely he has guarded control of the company even as outside capital floods in.
From Research Curiosity to IPO Contender
DeepSeek was a little-known research spinout of a Chinese hedge fund until January 2025, when it released R1, a reasoning model that performed competitively with OpenAI's and Google's best systems despite reportedly using a fraction of the computing power. The release triggered a one-day selloff in Nvidia and other AI-infrastructure stocks and forced a broader reassessment of how much raw computing power is actually needed to build frontier AI. DeepSeek stayed free of outside investors for most of the two years that followed, a rarity in an industry defined by multibillion-dollar fundraising.
That changed this year as the company moved toward commercialization and, now, a public listing. Annualized revenue is approaching $500 million, the first concrete revenue figure to become public for the Hangzhou lab, according to people briefed on the numbers. DeepSeek is said to be aiming to file IPO paperwork before the end of 2026 for a listing on the Shanghai Stock Exchange's Star Market, a Nasdaq-style board for technology companies, with a market debut targeted for 2027, per the Post's reporting and additional accounts from w.media.
A Fundraising Race Shadowed by Export Controls
A valuation near $74 billion would put DeepSeek in the same tier as some of the best-funded American AI labs, even though U.S. export restrictions have limited its access to the most advanced Nvidia chips. The company has leaned instead on more efficient model architectures and, according to people close to its planning, told prospective investors it intends to keep prioritizing open-source model research over near-term commercial products — a stance that differs sharply from the monetization pushes under way at OpenAI and Anthropic.
The listing plan also carries geopolitical weight. A successful IPO would hand Beijing a flagship example of a homegrown AI champion reaching public markets on its own terms, at a moment when Washington has tightened chip export rules aimed at slowing China's AI progress. Investors weighing the new round are doing so against that backdrop, along with the normal uncertainties of a fast-moving fundraise: several of the figures involved, including the exact size of the round, remain in flux and could still change before any deal closes.
For now, DeepSeek's underwriter selection and the structure of the pre-IPO round are the clearest signals yet that the company, once content to operate outside the conventional venture-funding playbook, is preparing to answer to public shareholders. Whether regulators in Beijing and Shanghai approve the listing on the timeline DeepSeek wants will be the next marker to watch.
